All Grown Up

Those who can’t do, sue?

That’s what I thought when I read that Google is suing the Interior Department. The government agency is taking bids on a $60 million contract to design a web-based email system, and has required that Microsoft applications like Word, Excel, and Powerpoint be integrated into the solution.

This was too much for the online giant, so Google filed suit, claiming that the stipulation unfairly restricts competition by excluding Google Apps. I don’t know, it also excludes Wordperfect, Visicalc, and Linux. Maybe Apple and the Open Source Forum should file suit, too.

The reality is that Word and Excel are everywhere. It’s rare to find a document created in any other format. So it seems reasonable to require they be used. But like an iceberg, the story you see is not the full story. Google and Microsoft are locked in a competitive embrace, and legal tools are just another weapon in the war. It’s not the government, but Microsoft, that Google is after.

As an investor, I don’t mind when two companies I own compete with each other. It keeps them both sharp. Consumers get better value, companies expand their markets, and investors see greater profits. Everyone wins. But when the competition moves to the courtroom or K-Street, it’s safe to conclude that value is not being created.

Something’s wrong when lawyers are the engine of growth. This isn’t even a bug on Google’s windshield, but growing via lawsuit has to spell the end of its youthful innocence.

Douglas R. Tengdin, CFA Chief Investment OfficerHit reply if you have any questions—I read them all!

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Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. -
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